Banking on a blockbuster

Hundreds of millions of dollars are spent on "event movies" - but where does the money actually go? Archie Thomas runs his eye over the books of Spider-Man 2.

The major studios used to beat their chests in triumph about big-budget movies. In 1951, MGM took an ad in Variety to announce that it was spending a record $US7 million ($10.3 million) on its period extravaganza, Quo Vadis. Half a century on, studio execs are loath to reveal spiralling budgets, which are topping $US200 million only seven years after the $US100 million mark was passed. The abject fear in Hollywood of being responsible for a blockbuster that stiffs makes accurate budgets increasingly hard to discover, but industry gossip will always find a way.

The modern-day blockbuster has become far more than just a movie. However strong the characters and storyline, none of the new breed of blockbusters gets the go-ahead unless it can justify itself in terms of its TV spin-offs, sequels, merchandising opportunities and DVD tie-in. It is no longer enough to get pre-programmed audiences crammed into the multiplex when they could be buying the toy, drinking the drink and wearing the T-shirt, too.

Average total costs, including marketing, for a studio film recently soared 15 per cent and topped $US100 million for the first time ever.

Although studio executives protest that they are forever working at reducing production costs, there is a vested interest in big-budget, effects-heavy blockbusters. By pushing the cost through the roof, they keep a stranglehold on the capability to create grand-scale projects and the access to the considerable financial upsides of the hits.

When they have a monster hit, as Sony did with Spider-Man, there is only one thing for it: bottle the winning formula by reuniting the cast and plough on with the sequel.

BEFORE: THE DEALS ($US30M)Script & development: $US10m

The script budget on a film is typically 5 per cent of the total budget. In 1999, Sony signed a potentially revolutionary deal with 31 A-list Hollywood writers, promising 2 per cent of gross receipts once the studio had recouped costs. Each writer was obliged to write at least one script for Sony over four years and could reject on a maximum of four projects Sony offered.

Considering Spider-Man made $US821 million worldwide, writer David Koepp is considered to be the biggest beneficiary of the Sony deal, netting an eight-figure payday. Unsurprisingly, a batch of four fresh writers, including Pulitzer prize-winning novelist Michael Chabon - who are conveniently not contracted to Sony - penned Spider-Man 2. In addition, it is likely uncredited but well-paid script doctors were drafted in to rewrite certain scenes.

Scriptwriters are notoriously at the bottom of the Hollywood food chain. Under the Writer's Guild of America's basic agreement, writers are paid a minimum of $US35,079 for an original screenplay. Known writers, of course, can command much higher fees, whether or not their scripts get made. Joe "Basic Instinct" Eszterhas has nine unproduced screenplays in "development hell", for which he has been paid around $US23 million.

Licensing: $US20 million

Marvel owns the Spider-Man character. Since Sony bought the movie rights in 1999, there has been ongoing bickering and litigation between Marvel and Sony, pushing the licensing price up further. Marvel alleged that Sony was attempting to disassociate Spider-Man from its creator. Sony countersued, suggesting Marvel was kicking up a fuss to force a renegotiation of the contract.

Shared greed means differences have been placed on the back burner so as not to disrupt this year's marketing campaign. Plans for

Spider-Man 3 are already at an advanced stage and a tentative May 4, 2007, release date has been set.

Stan Lee, the co-creator of the Spider-Man comic character, acts as executive producer on Spider-Man 2. Marvel pay Lee an annual salary of $US1 million, but Lee has threatened to sue for a share of profits from licensing.

DURING THE SHOOT ($US100 MILLION)

The big money is doled out to the stars, the director and the producers. They are what's called "above-the-line" costs that the studios are committed to paying before the cameras even start to roll.

Producers: $US15 million

"What is an associate producer?" Billy Wilder was once asked. "Anybody," he replied, "who will associate with the producer." Blockbusters spawn numerous producers who all expect a slice of the pie. Spider-Man 2 has two producers, one co-producer and three executive producers, and one of Hollywood's better-kept secrets is the phenomenal fees producers can get. As well as performance-related bonuses, or "bumps", from Spider-Man reaching box-office targets, producer Laura Ziskin is rumoured to have pocketed over $US30 million. The escalating fees paid to A-list acting talent are often reported, but the producers are among the richest people on the set.

Director: $US10 million

In the age of studio-led blockbuster movies, the director has less and less autonomy, and is often brought on board after the studio has already completed casting. If test audiences dislike a scene, the director is obliged to cut or reshoot. For their pains, directors can still command a hefty fee.

For the first Spider-Man movie, then Columbia Pictures chairwoman Amy Pascal surprised the community by hiring Evil Dead director Sam Raimi, whose biggest hit up to that point was Darkman (1990), which scored an unremarkable $US34 million at the US box office. Pascal was convinced by Raimi's passion for the material and the savvy move kept above-the-line costs down.

Despite Pascal's big result with Raimi, skimping on the talent for a blockbuster is a risky business. To trim the costs of The Alamo by a reported $US25 million, Disney did without Oscar winners Ron Howard and Russell Crowe, and ended up with John Lee Hancock and Dennis Quaid. The budget still came in at over $US100 million and the lacklustre US opening weekend of $US9 million underlined their shortsightedness.

The biggest upfront payday for a director is the $US20 million plus 20 per cent of the gross paid to Peter Jackson and his writing partners, Fran Walsh and Philippa Boyens, by Universal for King Kong. Jackson had initially planned to follow up his marathon Lord of the Rings trilogy with a small, effects-free project but was lured back by the opportunity to remake the 1933 classic he loved as a child.

Cast: $US27 million

Tobey Maguire landed the title role in the original Spider-Man after first-choice Heath Ledger passed. His payday of $US4 million for Spider-Man leapt to an upfront $US17 million for the sequel, although it was not always a foregone conclusion he would keep the Peter Parker role. In fact, Maguire was fired, replaced, and then rehired. His fee was not the problem but Columbia felt his petulant behaviour during pre-production didn't reflect enough gratitude to the studio. Coming off the demanding Seabiscuit shoot, which had required strict dieting, Maguire persistently complained of a bad back. Unimpressed, top brass considered recasting the movie. An offer was made to Jake Gyllenhaal. This made sense because his turn opposite Jennifer Aniston in indie hit The Good Girl had made him hot property, and he was the new date of Kirsten Dunst, Maguire's ex-girlfriend. The move for Gyllenhaal was a shot across the bows for Maguire.

At that point, Maguire's team of representatives stepped in, as did Ron Meyer, president of Vivendi Universal, and father of Jennifer Meyer (Maguire's current beau). They all assured the studio that Maguire would behave, as would his achey back. Maguire agreed to medical tests that would prove his fitness for duty after Columbia took the unusual step of insisting that the renegotiated contract contain specific clauses stating that Maguire's back was in good condition.

Industry insiders estimate returning co-topliner Kirsten Dunst may have got $US5 million to $6 million for Spider-Man 2. New baddie Alfred Molina would be paid in the region of $US1 million. The rest of the cast will have shared $US6 million. Actors' agents and managers go home happy with a tasty 10 to 15 per cent of their clients' payday.

"Below-the-line" costs are the physical production expenses of the shoot, including crew fees. The costs of hiring and operating state-of-the-art equipment, corralling and feeding armies of extras, occupying and vacating locations, and, above all, employing thousands of high-salaried crew members are enormous. And you can bet everyone was paid properly for the sequel to the biggest opening film in history. According to a source close to the more modestly budgeted Thunderbirds, "The daily burn rate for movie shoots is staggering.

We were employing 870 people on an average salary of 200 ($500) a day, so you can see how the costs race up."

Principal photography on Spider-Man 2 began on April 12 last year in New York, where the production spent three weeks shooting at various locations. The shoot was tight as returning love interest Dunst was committed to begin the Wimbledon shoot for Universal in June. The filmmakers chose to use more of the real city in the sequel, which would suggest an effort was made to keep the visual effects budget in check. The most demanding - and expensive - technical shot was a 730-metre "Spidercam" wire shot dipping and diving over Wall Street.

AFTER: THE EDIT ($US70 MILLION)Special effects: $US65 million

The lion's share of the post-production budget is now spent on special effects. Editing remains a sizeable chunk but, along with above-the-line costs, the effects budget on blockbusters is one of the big spends, and is growing fast.

In the first Matrix movie (1999), there were 412 special effects shots, compared with a whopping 3000-plus for the next two instalments. The cost: more than $US100 million.

Rumours are that The Hulk's visual effects ran way over budget and topped $US100 million. Effects house Industrial Light & Magic needed $US40 million just to create Bruce Banner's alter ego for the film.

Rival studios compete to bring groundbreaking effects to the multiplex, and blockbusters are increasingly sold as much on the magnitude of their state-of-the-art visuals as the attached talent, e.g. The Day After Tomorrow's computer-generated tidal wave sweeping through New York.

The first computer-generated (CG) creature was seen in Young Sherlock Holmes in 1985, but digital characters are now commonplace. Beyond the obvious CG characters, such as scene-stealer Gollum in The Lord of the Rings: The Two Towers, blockbusters are riddled with digital doubles integrated into digital environments. It isn't really Tobey Maguire crawling those walls. In fact, it isn't even the real Manhattan streets he is swinging through in some scenes. According to Raimi, "it is not absolutely real New York, nor is it some fantasy town".

It will come as no surprise that blockbuster directors are increasingly investing in effects facilities. Peter Jackson owns one-third of the New Zealand-based facility Weta, which is working on King Kong.

Music: $US5 million

No more than 2 per cent of the budget. Three-time Oscar-nominated Danny Elfman composed the music for Spider-Man 2 for a fee nearing 2 million. Sony Music Soundtrax will put out the official soundtrack that includes tracks by Jet and Train. The first Spider-Man album debuted at No. 4 on the US albums chart, and sold more than 2 million copies worldwide.

THE SELL ($US75 MILLION)

Prints & advertising: $US75 million

The print and advertising (P&A) costs are not actually included in the production budget. Having already spent $US200 million on making the film, the studios are now committed to spending even more money on marketing it.

Global same-day release patterns, introduced to combat piracy, are inflating the print and advertising costs hugely. Last year, studios spent an average of $US39 million on P&A in the US alone, an increase of 28 per cent over the year before.

In the old days, studios used to be able to roll out releases territory by territory, often building on the US opening and word of mouth. Nowadays, saturation campaigns are a necessity to push the product and make sure it scores big on the all-important opening weekend.

Impatient studios adamant on a simultaneous release, or something close to it, pay top whack to complete dubbing and subtitling quickly, and are unable to recycle prints as they did in the past. Argentine cinemas used to get prints that might have gone right across the American Midwest, but due to time restrictions, more and more new prints now have to be struck.

P&A costs are eased by a liberal dose of product placement. Samsung pumped a staggering $US100 million into promoting The Matrix Reloaded, and Ford threw $US35 million behind the wheel of Die Another Day. Studios assure audiences that placement is only considered if it is "an organic fit".

The Spider-Man 2 campaign has been relatively cautious but is now ramping up. Aware of the dangers of overkill, marketing chiefs chose not to take a US TV ad during the Superbowl, calculating that there is no real awareness problem with Spider-Man. Too much hype can undoubtedly damage a film's box-office business. The Matrix Reloaded is often cited as an example of a film which was sold too hard and promised too much.

In a minor league upset for the Spider-Man marketeers, US baseball fans rebelled when the Spider-Man logos were placed on the bases at 15 major league stadiums. Fans were furious that the hallowed turf had been sullied and the logos were swiftly removed from the field of play.